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On Wills and Trusts

In last month's blog entry on Parents' Issues of the Day, our conversation turned to wills and trusts. One of the findings of that survey by Global Strategy Group was that only 23 percent of parents have wills.

So, I called certified financial planner Gary Altman, who is president of the Financial Planning Association's D.C. Chapter. Altman specializes in estate planning. Here's an edited version of our Q&A:

When someone new comes into your office, how do you begin the process of estate planning?

Altman: No one wants to think about dying. My goal is to listen. They may be concerned about their kids, a charity. Once I've gotten an understanding of what they are looking for, then we start to make recommendations about what they should be doing.

What kind of person should a parent look for when planning their estate?

Altman: Most family planning fails. Wills might be perfect, but the assets might not be directed properly. Most young couples have a house, maybe a joint checking account, a few investments, a retirement account and life insurance. A will doesn't govern the retirement account and the life insurance, which may be the largest cash. A retirement account and life insurance may be left to children as beneficiaries, but children can't own property. Then, the money ends up in probate or under a guardian appointed by the court.

If a will doesn't cover retirement accounts and life insurance, what do you advise?

Altman: What I'm about to say might be controversial. I have most couples do a revocable trust and name that [the trust] as the beneficiary.

Let's say you have minor children and you die without a will. What happens?

Altman: Let's say my spouse dies and I'm alive. The living parent is guardian. If life insurance's beneficiary is named as the kids instead of me, then I have no right to control the money until I'm appointed by the court as guardian and the court must approve big expenditures in advance like paying elementary school tuition. It's both expensive and intrusive.

Suppose I then die and there's no will, then no one's been appointed guardian of the kids. Let's say both my wife and I have siblings and my brother says he wants the kids. The court will appoint him if they think is the best guardian even if I or my wife didn't particularly like that sibling. If I specify the guardian, then the court is likely to approve my choice unless the person is inappropriate.

Who should a parent choose as guardian?

Altman: The guardian is someone who you think would raise children in a manner you would and love them as you would. A trustee manages the money. They don't need to be the same people. People name trustees in wills who manage the assets until the kids are old enough to manage those assets. That age is a personal opinion. Typically, people release 1/3 of the money when the child turns 25, 1/3 at 30 and the balance at 35.

How much does it cost to write a will using a lawyer?

Altman: The cost is dependent on where you live and the type of lawyer. You can find someone who charges less, but they don't specialize in estate planning and the plan is more likely to fail. The typical cost in D.C. for a relatively basic plan with no tax planning and with power of attorney and medical doctor planning could cost about $1500 and up to $5000 by a lawyer who specializes in estate planning. A revocable trust may or may not be included in that cost.

What about will software? Should parents use it?

Altman: Would you take down step-by-step instructions to do heart surgery? If the worst happens do you want to rely on filling out papers by following directions? You can use the money you'd spend on a big-screen TV to protect your children.

You've discussed the benefits of the revocable trust. What are the downsides?

Altman: The Register of Wills would say the added cost, people don't fund them -- meaning that the don't change beneficiaries -- and trust mills, or factories, that sell trusts as products via questionnaires. There's no difference between using trust mills and software.

Alright, readers. What do you think of all this information? Do you have a will and/or a trust? What effort/expense did it cost you to put your desires in writing officially? If you don't have a will, why not?

By Stacey Garfinkle |  December 12, 2007; 7:00 AM ET
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Comments


Yes, we have a will and have legally named a guardian for our child. We paid around $1000 for our attorney. We don't have a revocable trust. In the event either one of us dies, we leave the money to the remaining spouse, in the event both of our dies, it is left to our daughter. We will ammend the will after baby #2 arrives. Our life insurance and our retirement accounts list each other as beneficiaries and in the event of both of our demise, it will go to our children. Our daughter right now seemed too young to specify how much money to leave at each age. As she gets older, we might ammend the will. But I think it is important to have a basic will and guardian set up for your kids. I know that certain family members think they are automatically the guardian and we did not choose them. So I am glad it is in writing.

Posted by: foamgnome | December 12, 2007 7:46 AM | Report abuse

We went through this whole process last year - settup a living trust, wills, living wills, etc. It cost us about $2,000 and it was worth every penny. The great thing about having the trust is we specify when and how the kids can have access to the money and how their guardian can use the money.

Posted by: Dennis | December 12, 2007 8:02 AM | Report abuse

We have a will, trust, living wills and durable power of attorney. I believe it cost us about $1000 but it was awhile ago, after my first child was born. All our money from life insurance, investments, etc. goes into trust with spouse as trustee and if both of us pass then we've named someone else until the kids are 22, out of college. The guardian is a different family member than the trustee. I would urge all parents to do this. It gives you peace of mind and you know it's all accounted for. I'm also a fan of life insurance. Since we got ours at fairly young ages the yearly premium is not that high and it will really help either of us deal with becoming a single one-income family suddenly or help the guardians raise our children.

Posted by: PT Fed Mof2 | December 12, 2007 8:28 AM | Report abuse

There's a big difference between a financial planner's advice and that of a lawyer who practices in estates and trusts. Mr. Altman needs to watch the line, for he may be attempting to practice law without a license.

If you need a will or trust, etc. set up - please see an attorney. It is just too important of a matter to try to be cheap on. Also, a basic will, power of attorney and advanced directive can be put together for far less than $1500. Try half that.

A good attorney will be able to help you figure out what is best for your needs. Everyone's situation is different. Revocable trusts are the "trendy" thing right now, but they are not right for everyone.

Readers should also be cautioned that there are a lot of companies out there who are trying to scam people (especially the elderly) into setting up revocable trusts, but instead, are ripping them off.

Taking care of your money during your lifetime is something that can be handled by a financial planner. What happens to your money after you die is a legal question and should be handled by an attorney.

Posted by: Danielle, Esq. | December 12, 2007 8:31 AM | Report abuse

DW and I both have wills. We named DW's sister as guardian of the children; however, the oldest can elect to be the guardian of any minor siblings should she want to. (That is, if we both die when oldest DD is 24 and youngest DD is 16, oldest DD can elect to become her younger sister's guardian.)

We also have trustees set up to manage the money in the event we both die. Life insurance - each spouse has the other as primary beneficiary; should the other spouse already be dead (or die in the same accident) the money is split equally among the four kids. Same for retirement accounts.

Trustees manage money until the kids are 25. Primary trustee is my brother.

$1,500 - 5,000? Say what? We had the entire package done - both wills, etc. etc. - for $500 by a very well qualified attorney in Howard County. I guess the higher costs might seem reasonable to people who pay elementary school tuition that's a significant sum, or would pay 1,500 - 5,000 for a big screen TV. Not the world I inhabit, though.

Posted by: Army Brat | December 12, 2007 8:34 AM | Report abuse

I agree, this is a blog entry that should have been written by an estate planning attorney. I'm an attorney myself but hired someone else to do our wills because I don't practice in that area of the law.

Posted by: PLS | December 12, 2007 8:38 AM | Report abuse

"I agree, this is a blog entry that should have been written by an estate planning attorney."

Ditto.

Posted by: chittybangbang | December 12, 2007 8:50 AM | Report abuse

The cost is what's keeping my husband and I from doing this. We hardly have money for a flat screen TV! Thanks for assuming we're all painfully rich. I guess we need to set aside money for 6 months to afford this service.

Posted by: atb | December 12, 2007 8:53 AM | Report abuse

We do have a will with family friends as our guardians. The one thing that I did make sure to do was inform both my parents and my husbands parents/siblings who we had named as the guardian and why. Because we chose friends (a friend who works in the fmaily court system locally and asked me to be sure these steps were taken) instead of family, if our families chose to fight for custoday they would likely win. I do not want my children stuck in the middle of a custody battle if my husband and I should die.

We also have a trust, which is where our life insurance will go, with a different family friend named as our trustee. There are specific amounts we have asked be used for education and to be given as they reach certain ages.

I know we paid less than $1,000 to have all of this set up by a lawyer, but honestly, this is so important I would have paid more to be sure it was done right. Now I know my girls will be taken care of.

Posted by: Momof5 | December 12, 2007 8:53 AM | Report abuse

In Maryland, if your child receives an inheritance, often the court will require that a guardian be named. That is most often a parent, but not always. And then, when the child wants to spend some of that money, ALL expenditures have to be approved by the court, not just large ones. That includes things like paying taxes on the earnings from the inheritance, paying the yearly fee to file the inventory for the "estate" of the child, and other miscellaneous expenses. And its not a quick process to get access to that money, you have to petition the court to get approval to use it, and it takes several weeks. And, the one thing that to me is most important, but not mentioned here, is that at age 18, all of that money is turned over to the child.

Another thing that surprised me when I dealt with probate and my children's inheritances, is that the court has rules about where you can invest their money. To meet these rules, I was unable to invest them in anything with a decent return. And you can't easily move the money, you normally need a court order to access it.

So, like everyone else has said, talk to a trusts and estates lawyer and take care of things, now! Don't go through what I went through when my husband unexpectedly passed away without a will.

Posted by: jj | December 12, 2007 8:54 AM | Report abuse

I actually am an attorney, although not a trust and estates attorney, but I do work in health care law. Please, please, please, for the love of all that is holy, do not perpetuate the dangerous myth that you need an attorney to do an advanced directive. It deters people from taking a very basic and fairly simple step that can save them, their families, and their health care providers a lot of trouble and heartache. Most states have a standard form available from the attorney general or health department. Talk to your doctor, your hospital, or the AARP if you can't find the form. Talk to your family about your preferences, designate a health care power of attorney (or whatever it is called in your state) and a backup, fill out the form, sign it. If you need to have it notarized, take it to your bank, where notary services are usually provided free to account holders. Go to Kinko's and make several copies - give one to your doctor, one to the individuals named in the directive, and keep one with your other important papers.

Then at least the advanced directive is covered until you finally get yourself and your $1000 to an attorney. By all means, have the attorney redo the advanced directive - just be sure to distribute the new one and take back the old ones - but don't wait until you're ready or able to do the much more expensive estate planning process.

Posted by: burntnorton | December 12, 2007 9:02 AM | Report abuse

To Danielle, Esq, PLS, and chittybangbang:

Gary Altman IS an attorney. We used him for our documents in 2004 and updates in 2006.

Posted by: Father of 2 | December 12, 2007 9:08 AM | Report abuse

Wills and trusts should definitely be prepared by an estates and trusts attorney. PLEASE do not ask the one attorney in your family to prepare everyone's will if that person does not pratice estate law! My family does not seem to understand when I tell them I can refer someone, but cannot do it for them. I practice corporate litigation and did not even write my own will. This is not the situation to be cheap.

Posted by: Sweetie | December 12, 2007 9:08 AM | Report abuse

Thanks, Father of 2, that's interesting. I don't know if that makes me feel better or worse about this particular blog entry. This blog gives the impression that a financial planner is a better person and a cheaper alternative to do this work than an attorney.

I guess my gut just thinks this blog is very misleading, leaves out a lot of information and doesn't give the soundest advice. I understand that there's a limited amount of space to work with, but this is too important and nuanced of a topic to confine to a blog post. I am also just personally uncomfortable with an attorney/certified financial planner. My own personal opinion is that this creates a conflict of interest, and that the roles should be held by seperate individuals.

I also understand that Mr. Altman did not write the blog post, it appears to be a pick and choose statements from a brief conversation.

Posted by: Danielle, Esq. | December 12, 2007 9:15 AM | Report abuse

I agree with the commentors who said that if money is an obstacle, you are better off writing a will yourself than waiting a year to save up money for an attorney.

There is nothing in the information above that isn't contained in the NoLo will book, which sells for $15 at www.nolo.com and contains several samples of simple legal wills for people with less than a million dollars in assets. If you have a complicated situation or you're convinced you need a lawyer for this, and you can afford a lawyer--good for you. If you can't afford $1500 to do this, protect your family anyway. If your assets are simple, writing a will is NOT heart surgery.

Posted by: Elizabeth | December 12, 2007 9:16 AM | Report abuse

In Florida, the state provides a "Nomination of Guardian" form, which probate courts must follow (unlike naming a guardian in a will, which is a simply a suggestion for the court, not a requirement). The form allows naming a guardian and a successor guardian -- in case the first choice is not available when he/she is needed. It doesn't cost a thing, the form's available at state offices, and can be easily filed and changed if need be. If you can't afford the full cost of all estate documents, this form provides at least some benefits. Likewise, there are state forms for living wills and advance health directives, available in most hospitals. Perhaps other states have similar forms.

I agree, the blog should have relied on an attorney and not a financial planner. The costs quoted seemed very high to me (but then financial planners tend to work with wealthier clients or those who have more complicated arrangements like business owners.)

Revocable trusts are useful tools, as long as assets are retitled into trust name and the trust is the beneficiary of insurance or retirement plans -- so drawing up a trust is only the first step in the process. That is the number one failing of most of these plans. If the property isn't in trust name, the trust has no effect.

Ah, the best-laid plans of mice and men....

Posted by: twobits | December 12, 2007 9:17 AM | Report abuse

Well, he was introduced as a "certified financial planner" at the beginning of the blog, not as an attorney. How am I supposed to know otherwise?

Posted by: PLS | December 12, 2007 9:18 AM | Report abuse

Danielle, Esq.:

I agree, the beginning of the blog SHOULD refer to Gary as an attorney AND a certified financial planner. True, space is limited but how hard is it to add:

Areas of Practice
*Trusts and Estates Taxation
*Probate
*Estate Planning
*Wills
*Trust Law

Certification/Specialties
*Certified Financial Planner, 1988

Bar Admissions
*District of Columbia, 1980
*Maryland, 1992

From http://www.altmanassociates.net

Posted by: Father of 2 | December 12, 2007 9:19 AM | Report abuse

I know in CA, there are lawyers who provide reduced-priced services to people without the funds to pay for the high-priced guys (can't remember what it's called, but my grandfather used them years ago). Is there something similair in the DC area? Otherwise, we're sticking with the software. That $1500 is earmarked for preschool. Plus we'll need to update things once #2 arrives.

I also Altman's comments about the big-screen TV vs a trust a little offensive. Most people in this country simply do not have this kind of money sitting around- for a big screen tv or anything else. But since he's a trust lawyer, *of course* he doesn't want people using the software!

armybrat- can I ask who did your documents in howard county? If I could get this done for $500, I would do it this week.

Posted by: reston, va | December 12, 2007 9:44 AM | Report abuse

Oh my god - how can you not have a will if you have kids? H*ll, how can you not have one once you own property or have a decent bank account, parent or not?

My husband and I got them about two years ago after we moved to the Midwest (along with life insurance for him). Because if something happens to him, we want to be absolutely sure the estate comes to me. I wouldn't dream of denying his family anything with sentimental value or family history. But there are a few people in his family I can see popping out of the woodwork demanding things I could ill afford to lose at a time like that. Estate laws being what they are, they probably wouldn't get them anyway, but a will makes it perfectly clear. (My family is far more sane if the reverse happened - they'd probably GIVE my husband things.)

And if something happens to both of us, we wanted to make sure our families didn't have to have to go through some sort of protracted legal procedure to settle our estate. It's all spelled out what needs to be done, and who gets what. (In our case - the estate is liquidated and the net goes into an educational trust that is split equally amongst our scattered nieces and nephews. Probably wouldn't be too much, but it would be something.)

Our lawyer even put in provisions for when we DO have kids. She said she's sure we'd tweak the will once we have kids, but if something happens before we get the chance (those first few months of parenting being what they are), it's better to have it completely spelled out that the estate goes to him/her.

Posted by: Chasmosaur1 | December 12, 2007 9:44 AM | Report abuse

We worked with a lawyer who specialized in estate planning on our wills, medical power of attorney, and a trust before moving overseas 2.5 years ago with our then-infant daughter. Thankfully we got a "friends and family" rate with the firm and I believe it was less than $2000 for all the documents. Ours were a bit more complicated as I also had to be added as an owner of our home, and we had some fairly specific guidelines written into the trust and powers of attorney.

It was a hassle to meet with lawyers and go over all this material at a time when we were packing up our household and also hard to say goodbye to some hard-earned cash but in my opinion, was one of the wisest things we've ever done. We wouldn't have done it on our own, I fear, but we did it because it was highly recommended as one of the "steps" before moving abroad.

I feel much more secure and relaxed knowing specifically how my daughter will be cared for if something awful were to ever happen to us, and I have over the past two years recommended to many of my friends and acquaintances that they consider doing this sooner, rather than later.

As for the whole issue of "writing it yourself off the internet" vs "paying for an attorney" my thinking is, if I'm going to do it, I'm going to do it right. That's not to say that you couldn't do it yourself and come up with something acceptable, but that's just not a risk I personally am willing to take.

Posted by: viennamom | December 12, 2007 9:52 AM | Report abuse

If you have enough money to worry about what happens to it when you die, then you should be willing to spend a couple hundred dollars to get your affairs in order.

And a huge buyer beware on do it yourself kits - every state is different and there are many different nuances and little things that need to be in order.

If you want the piece of mind of having your affairs in order - why would you want to do it yourself and take the risk that you'd screw something up?

This isn't something to cheap out on.

There are many solo practioners who can do a more than adequate job in preparing your will and other documents for a very low cost. Heck, I work in a 60 attorney firm in a mid-major city and I think our basic package is about $700.

Again, why would you want to risk doing something like this yourself? Wills aren't easy. I am an attorney who took estates and trusts class and who has passed the bar in three different states (all of which required knowledge of wills and trusts) - and I still wouldn't prepare one without assistance from one of our gurus.

Posted by: Danielle, Esq. | December 12, 2007 9:56 AM | Report abuse

My wife's father had a will that designated most of his assets to his adult children. He passed away 2 years ago. When it came to dividing his estate, the lawyers and stepwives got 10s of thousands of dollars, my wife and her siblings ended up with a toy train.

When I think about making up a will, I have no idea what to do with my modest assets to begin with. Plus, life is way too dynamic to make any binding decisions right now. Will the people we specify as gardiens of our kids move to California, get divorced, lose their job. or will any of at least 25 things I can think of right now that could change that will make us rethink our decisions, thus having to amend the will?

To me, it's not worth the $2000 , and I trust that the courts will make decisions in the best interest of my surviving family in the small chance that my wife and I will pass away at the same time.

And besides, a will can only serve my desires after I die. At that point, I won't care what happens.

Posted by: DandyLion | December 12, 2007 9:58 AM | Report abuse

"I trust that the courts will make decisions in the best interest of my surviving family in the small chance that my wife and I will pass away at the same time."

Oh the naivety is classic. Courts only care what is best argued before it. So the better lawyer will get what he/she wants for his/her client.

"And besides, a will can only serve my desires after I die. At that point, I won't care what happens"

Glad I'm not part of your family since you don't care what happens to them after you're dead.

Posted by: To DandyLion | December 12, 2007 10:04 AM | Report abuse

DandyLion: You will care about your wife and children after you die. That is why you have a will. I don't know what happened to your wife's parents because usually (specially simple wills) are carried out as long as the will was registered and notarized. In the event of remarriage, I think it is even more important to have a will written. FIL is set to marry for the third time. My husband is a product of his first marriage. But he has a special needs son from his second marriage. And there is nothing in his will to designate any specific amount to take care of the special needs son versus his other kids or his new wife. In fact, the jerk doesn't even have a will. When you have a profoundly challenged child, I think it is so wrong not to take care of him legally and financially (if you can), after you die by simply getting an attorney to write a will.

Posted by: foamgnome | December 12, 2007 10:04 AM | Report abuse

"My wife's father had a will that designated most of his assets to his adult children. He passed away 2 years ago. When it came to dividing his estate, the lawyers and stepwives got 10s of thousands of dollars, my wife and her siblings ended up with a toy train."

Dandy, similair thing happend to a friend of the family- his parents were quite well-off and had wills leaving him all their assets, but when his mother died her extended family contested the will, tied everything up in lawsuits for years, and ended up with everything. He ended up being thrown out of the house she had left him and rents a room from a friend. Oh, and did I mention he's blind? Really wonderful bunch of people.

Posted by: reston, va | December 12, 2007 10:08 AM | Report abuse

Could some of the people who are posting about affordable attorneys possible post some names, or even just suggestions on where to find these people? I would *love* to find someone who would do this for less than $1000, but I keep calling people and coming up empty.

Posted by: va | December 12, 2007 10:19 AM | Report abuse

James E. Bitner attorney at law
jimbitner@juno.com
703-281-5055
Oakton VA
I think basic package is closer to $650-700. Several friends and myself used them for normal simple wills. Not trusts.

Posted by: Anonymous | December 12, 2007 10:24 AM | Report abuse

Thank you!!!

Posted by: va | December 12, 2007 10:34 AM | Report abuse

"Glad I'm not part of your family since you don't care what happens to them after you're dead."


How can a dead person care about anything?

Posted by: DandyLion | December 12, 2007 10:36 AM | Report abuse

""Glad I'm not part of your family since you don't care what happens to them after you're dead."

How can a dead person care about anything?"

You're a fool.

Posted by: To DandyLion | December 12, 2007 10:43 AM | Report abuse

Yeah, well, as with everything, ask what you are getting for your money.

Are you getting only a will?

You should get wills, a healthcare power of attorney, durable power of attorney (financial), and a living will - for each of you.

Will an attorney meet with you and explain your options? Advice takes time and is worth every penny. YOU make the decision, not your counsel. Or will your only point of contact be her paralegal?

Like insurance or anything else, price matters, but what matters most is knowing what you are getting for that price so you can compare.

Elizabeth, you are naive. Assets are not what worries, and should worry, people most. Guardianship for one's kids, and creating a situation where the remaining spouse can access accounts to bills and take care of the kids after you die - THESE are why it is critical to have an enforceable legal will, etc. There's nothing like a frozen bank account to make a grieving spouse think fondly of her dearly departed.

Dandy, You're a little off on this one.


Posted by: mn.188 | December 12, 2007 10:48 AM | Report abuse

I went back to the lawyer who'd handled my divorce about a year ago and paid her $800 to draw up my will and to fill out a document that would allow me to make a basic change to existing custody arrangements that my ex-husband had agreed to. The latter paperwork arrived about four months later, at which time, my ex -- in the throes of mental illness -- no longer would sign. The will came a couple months later and had so many mistakes I stuck it in a drawer until I could figure out what to do. I still don't know what to do. I don't really want to go back to this woman after the f***'d up so badly the first time. And I sure don't have another $800 to waste.

Posted by: anne.saunders | December 12, 2007 10:50 AM | Report abuse

To clarify : the lawyer sent me a draft of the will -- it has never been properly signed.

Posted by: anne.saunders | December 12, 2007 10:54 AM | Report abuse

DandyLion - I obviously don't know what happened with your father's estate or anyone else's where the will was contested, but there are a couple of principles to keep in mind. First, in most states, a spouse is automatically entitled to a share (often the first $x plus about 30% of whatever's left) of the other spouse's estate, in addition to any assets that were owned jointly by the couple. So if your father's will didn't take this into account, your stepmother probably had the right to elect a share.

Second, in many states, any wills made before an event such as marriage, divorce, or (sometimes) the birth of a child are presumed to be revoked by the event. That's why many wills specifically include the disclaimer that they are to continue regardless of whether any of those events occur.

Finally, trusting the courts is an idiotic and expensive strategy. It will cause your children and spouse serious problems and expense, especially if a guardian of the property has to go back to ask the court's permission every time she needs to buy a toothbrush for the kids. Moreover, there are ways to plan for and deal with fluid situations (guardian-designees moving, etc.) with minimal or no expense. In order to find out what they are, though, you have to actually talk to a lawyer in your state.

Closing your eyes, covering your eyes, and humming loudly because your father screwed up his estate planning is not a wise or loving strategy.

Posted by: burntnorton | December 12, 2007 10:55 AM | Report abuse

"Finally, trusting the courts is an idiotic and expensive strategy"

And could result in nothing from your estate going to charity/causes . Great example for the kiddies! But since you don't give a sh!t what happens after you are dead, what the heck! Way to go!

Posted by: Anonymous | December 12, 2007 11:03 AM | Report abuse

I'm a lawyer in the Winchester area and I have practiced estate planning law for over 20 years. Cost is relative to the area of the country in which you live. My firm does wills, powers of attorney and advance directives for a couple for about $1000. We take credit cards. We recommend doing documents piecemeal if cost is a concern.

Not doing documents can be a problem even if the "estate" is small. I have 2 clients currently that weren't prepared and didn't want to spend the money. Now they are looking at court costs so they can have a judge make the decisions for them. Not cost effective in the long run.

BTW, my fees haven't gone up much in 10 years so in my view, I'm charging significantly less than the rise in the cost of living or what someone with more than 20 years experience should charge. This is however, what the market will bear. I've kept my costs down so that people could afford my services.

Posted by: Sue, Esq. | December 12, 2007 11:12 AM | Report abuse

Here's another issue- how do you pick a guardian for the kids? My parents are our guardians, but we can't think of secondary people. DH's parents are not in the best of health, and his sibs are either not in a position to raise kids, or not people we would WANT to raise our kids (SIL's husband is a huge jerk- I wouldn't even leave him my cats). I am thinking about asking some friends of ours who I know would be great, but they live out-of-state and would only see our kids once a year at the most. So did you all go with family or what?

Posted by: reston, va | December 12, 2007 11:13 AM | Report abuse

We had picked one of our siblings. After seeing that sibling raising their own children, we felt a different sibling would be better so we changed the documents. Sure, cost some more but we wanted the kids raised the way we wanted them raised.

One thing we did is have sibling of one spouse be guardian but sibling of other spouse be in charge of the money. It adds "checks and balances" as well as makes sure neither side prevents the other from seeing the kids (not like it is likely to happen)

Posted by: Anon | December 12, 2007 11:20 AM | Report abuse

We choose my brother and his wife. It was a struggle for us as well. DH has two sisters. One has two kids and the couple is the god parent of our daughter. The problem lies is that SIL is a yeller and a hitter of her own kids. She is also verbally abusive to her husband. I don't want my daughter subjected to this kind of upbringing. Although the love my daughter and probably think they would be named guardians, we both decided this was not an option. I do think they would love and be honorable if they had been named guardian. But I did not want my kid being bullied on a daily basis. His second sister is married to a fairly well to do man. Financial planning purposes, they would be the best choice but the are adamant child free cuple. My eldest brother and wife would love to be named guardians. They would love and nurture my children. Problem lies in that they have the financial discpline of a slug. Love them to death but there is no way they could be reasonably responsible for the estate. Middle brother and wife are loving and nurturing, mildly good with money, and share our parenting views. Bingo they became guardians. But half the money will be elected to them to take care of our children and the other half will be elected to financial wise SIL for long term management. We never considered friends because no one jumped out at us and we would not want to burden non family. My best friend choose family friends for her son's guardian and trustee of his estate. She said her BIL did not meet her requirement both religiously and life style. Oh never considered either set of parents. Mine is too old and his father is a jerk and mother in law can barely take care of herself (although she does love her grand children).

Posted by: foamgnome | December 12, 2007 11:25 AM | Report abuse

Reston, va - I don't recall his name off the top of my head and a quick Google search didn't ring any bells (it was done about 4 years ago) - I'll see if I can dig up the name and post it later today.

Re: picking a guardian. It was tough, and there was almost a process of elimination. DW's parents? Realistically, too old - they'll be almost 90 by the time the youngest is ready to leave home. My mother? The same, plus she lives in North Carolina.

Siblings? On my side, my sister has never married and lives in Louisiana - not sure she'd want four kids and not sure the kids would want to move there. My brother is already a single father of two daughters; not sure he wants to raise six by himself. Plus, he lives in North Carolina, too - Mom moved next door to him to help with his daughters!

DW's siblings? One brother lives in Georgia, has four kids and is divorced. He's a nice guy but lots of reasons not to choose him. The other brother is married with three kids and lives in Silicon Valley. He's the backup guardian; he wasn't first choice mostly because of the move to California that would be involved.

That left DW's sister. She lives in another part of Maryland; is in a stable marriage with one child; and was willing to do it. Plus the kids know her reasonably well; they see her several times a year and before she was married they used to spend long weekends with her (one at a time).

It wasn't a pleasant process to go through to identify the guardian, and we hurt a lot of feelings, especially my mother's when we didn't choose her, but that's how we did it.

And we also choose my brother as the financial trustee; he's better with money/investing and that keeps both sides of the family involved.

Posted by: ArmyBrat | December 12, 2007 11:43 AM | Report abuse

"We had picked one of our siblings. After seeing that sibling raising their own children, we felt a different sibling would be better so we changed the documents."

If my wife and I specified the gardiens of our children at any given point in our lives, the documents would have needed to be changed every 4 months or so.

I saved a lot of money in the past 16 years so far by not being bullied into scare tactics propagated by lawyers and attorneys. And to think I should pay good money to specify something I didn't want due to a significant life change that happened before I could pay more good money to update the documents...

Am I supposed to assume that, if left up to the defaults of the courts without having lining the pocket of a lawyer beforehand, the the courts are garenteed to make unreasonable decisions on the behalf of me and my family? And even then, any will can be contested, so it's a crap shoot anyway. I've heard the line, "A fool and his money are soon parted", but as for me, soon has gone, and I still have the money!

I think wills are good ideas for those that have large assets to be protected and/or for those who want to will their belongings to a special cause or charity, but for me and those who don't have large assets and/or just want the basic, resonable death package for our family, a $2000 will doesn't buy us anything.

Posted by: DandyLion | December 12, 2007 12:11 PM | Report abuse

we have our life insurance a few years ago. we only have one girl. we have been thinking setting up the will. but here is our issue: we are from China. both of our familys are all in china. we have friends here. but not that close enough or we feel comfortable to make them guardian of our little girl. We both agree that my sister is the best candidate for the guardian. but she is in china. and we really don't want our daughter to go back and live in china (that would be the last last choice.) any suggestion to this situation? I think we need someone who knows immigration law better. would appreciate any recommendation.
question 2: can the guardian and the trustee be the same one?
thanks

Posted by: milym | December 12, 2007 12:12 PM | Report abuse

DandyLion

"I've heard the line, "A fool and his money are soon parted", but as for me, soon has gone, and I still have the money!"

I agree. You are indeed a fool!

Posted by: Anonymous | December 12, 2007 12:19 PM | Report abuse

Yes your guardian and your trustee can be the same person.
Don't know about your other situation. Best of luck.

Posted by: foamgnome | December 12, 2007 12:19 PM | Report abuse

"but she is in china. and we really don't want our daughter to go back and live in china (that would be the last last choice.) any suggestion to this situation? "

And I believe you CANNOT put in "rules" stating that the guardian can't take the child overseas. So, if your sister does come to the US and you name her the guardian and then you die, your sister can take the kids back to China.

Posted by: Father of 2 | December 12, 2007 12:24 PM | Report abuse

DadyLion, OK I will preface this with you know I love you, but you are so wrong on this one. You have four minor children and a wife to think about. If no one in your family is stable enough, look outside the realm of your own family. Because if you leave it up to the courts, they will go to your unstable family first. And not every will needs to be $2K. Like others have pointed out there are normal attorneys who start packages at around $500-700 in this area. If money is an issue, do the paper work piece mill or set up a payment plan. I think small practice attorney would rather have the business paid over a reasonable period of time then no business at all. Seriously, you think nothing of it but do you want to end up having both of you die, kid goes to brother who ends up divorced and unemployed, and your modest (but only $$ available for your children) is either tied up in court or wasted away by an irresponsible relative. Because unless your relatives are some threat to society or your kids, they will most likely end up with the one who petitions the court the loudest. Please reconsider doing a simple will. If nothing else, get the darn software for $50 and register your own will. It is better then nothing.

Posted by: foamgnome | December 12, 2007 12:24 PM | Report abuse

I have to say that stuff like this is why people dislike the legal profession. A reasonable person with an uncomplicated financial situation 'ought to be able to wirte: "When I die all my money should go to my wife. If we both die, it should be divided equally between my kids and managed by their uncle who will be their guardian until they are 26." The legal profession has so hypercomplicated every single situation such that we cannot function without them.

Posted by: Moxiemom | December 12, 2007 12:32 PM | Report abuse

milym - YES The guardian and the trustee can be the same person.

Posted by: Anonymous | December 12, 2007 12:36 PM | Report abuse

Saving money by not making out a will or a living trust is a false economy. With even modest assets there is a serious risk that your estate and your children will end up paying more to lawyers and courts in the probate process than it would have cost you to make preparations that would have minimized court involvement.

As for guardianship of your kids, if you think that your siblings are not the right people to raise your kids, then it is imperative that you have a will with guardianship instructions. Without one, a court will naturally look to those siblings as the first alternative caregiver.

Posted by: Tom T. | December 12, 2007 12:41 PM | Report abuse

Foamy, to ease your conscience, I'll tell you that my wife and I have a very, very simple will made out and notorized. It basicly reinstates the benefactors listed on are major accounts already. We also have joint accounts on everything except for my wife's credit card which I can't will on anybody, or can i? LOL!

As for the small items, like my guitars and garden tools, if my kids want to squabble over those things, I'm not really concerned. I am well aware that inheritence brings out the worst in siblings, but I pass it off as small beans as to what is really important in life.

And lastly, niether my wife or me have any siblings who we would hate to have gardienship of our children. No divorces either. so we are luchy in that regard. Now that I think about it, if I did select a gardien(s) for my kids in my will, at this time I would specify that decision be left up to our surviving family members. Things may change in the future, in which case my wife and I will take steps to adjust to the change.

Posted by: DandyLion | December 12, 2007 1:12 PM | Report abuse

Another thing to remember: minor children can own real estate, but they are not legally competent to buy or sell it. So if you die without a will and your house passes to your minor children by operation of law, they cannot sell that house without the court first appointing them a guardian to approve the sale. Typically this would be a local lawyer, and he or she would not be working for free. You can avoid this problem via a will that appoints a responsible family member (assuming one such exists, of course) as the guardian of your children's property.

Posted by: Tom T. | December 12, 2007 1:15 PM | Report abuse

DandyLion

"When I think about making up a will, I have no idea what to do with my modest assets to begin with. "

"Foamy, to ease your conscience, I'll tell you that my wife and I have a very, very simple will made out and notorized."

Sloppy, sloppy thinking. Typical of this writer and his parenting style.

Posted by: Anonymous | December 12, 2007 1:18 PM | Report abuse

Dad always wanted me to go to law school. Maybe the old man had a point...

Posted by: reston, va | December 12, 2007 1:25 PM | Report abuse

I see we've got our anonymous insult artist back in the 1:18 post.

Though I'll no doubt get painted with the same brush as DandyLion, I believe existing state law offers me as much protection as I'm going to get and a will is not going to help me much. As a divorced mom, custody of my kids goes to their dad if I die. Any will I write can't override that. As for assets, they will go to pay the costs of my death (and probably fall short at that). I don't mind if the courts decide what my ex can spend from my life insurance policy. Their college accounts are in the form of trusts and my father would become trustee if I die. Why do I need a will?
The only reason I considered it earlier was because my ex and I had agreed I'd take full custody. But the deal's off now and probably should be now that he's regained his health, job etc.

Posted by: anne | December 12, 2007 1:31 PM | Report abuse

"Their college accounts are in the form of trusts and my father would become trustee if I die."

State laws didn't protect you there so you got a trust set up. You start by saying lawyers aren't needed but then say you used one.

"As a divorced mom, custody of my kids goes to their dad if I die. Any will I write can't override that."

Correct. But what happens if your ex dies first? Who will get the kids then? A will stating that if your ex is dead, the kids go to a specific somebody is useful.

"I don't mind if the courts decide what my ex can spend from my life insurance policy."

Wouldn't you rather the money go to your kids for their benefit?

Posted by: Anon for this | December 12, 2007 1:38 PM | Report abuse

DandyLion, I'm glad I'm not one of your children.

Posted by: Anonymous | December 12, 2007 1:44 PM | Report abuse

Anon for this,
Duh, if my ex dies, there's a need for me to create a will and appoint a guardian (though family on either side really would be fine if I wasn't around to appoint anyone -- I'm lucky). That's why I wasted $800 on the effort when I was preparing to take sole custody. I'm still not convinced it does me much good now. As for the college trusts, they were set up by my father who paid any legal fees involved.
If I had plenty of money, sure, why not? No harm and maybe some good. But when I've already lost $800, I'm not so eager to try again if I can't see the clear necessity.
And feel free to convince me otherwise. That's why I'm posting.

Posted by: anne | December 12, 2007 1:47 PM | Report abuse

"DandyLion, I'm glad I'm not one of your children."

It's probably worse to be this bozo's wife...

Posted by: Anonymous | December 12, 2007 1:51 PM | Report abuse

"Duh, if my ex dies, there's a need for me to create a will and appoint a guardian (though family on either side really would be fine if I wasn't around to appoint anyone -- I'm lucky). "

Yes, you are lucky that both sides would be good but there might be a fight without clear instructions to your wishes (remember Terry Schaivo). Both sides want your kids and both sides fight it out in court - and your kids are caught in the middle.

As for your ex dying, it COULD happen tomorrow and then you might want a will (possibly need it). But while helping your children through their grief you forget. Then (God forbid), you cross the street infront of a Metro bus. Now, it's too late. Therefore, I believe it is important now.

Posted by: Anon for this | December 12, 2007 2:03 PM | Report abuse

Nobody plans to fail - they just fail to plan.

Posted by: As an old professor once said... | December 12, 2007 2:04 PM | Report abuse

"DandyLion, I'm glad I'm not one of your children."

I'm glad for that too!

Posted by: DandyLion | December 12, 2007 2:07 PM | Report abuse

Anon for this,
Points well taken. Thanks.

Posted by: anne | December 12, 2007 2:08 PM | Report abuse

"Having a will" is probably a bit too narrow; a more general term like "estate planning" is more meaningful. In that regard, it sounds like you're doing well. You've got the college funds taken care of through those trusts, you've got life insurance, and it doesn't sound like you own a house that could get tied up in probate. Disposing of your car might require a few legal contortions, if it passes to minor children on your death, but that's probably not that big a deal. Make sure you've designated a payable-on-death successor on any bank or retirement accounts, so that those can be transferred automatically.

It's true that your ex could die unexpectedly, and if you then die a week later, you probably wouldn't have gotten a will written in the interim. Still, it sounds like there are other good family members who would step into such a gap, so the court wouldn't be choosing without guidance.

It sounds like you've got things planned reasonably well for your situation. A will could nail things down more securely, but if money's tight, there are probably other things more pressing.

Posted by: Tom T. | December 12, 2007 2:08 PM | Report abuse

In my younger days, I once went to an accountant to have my taxes done, and I was very surprised when the computer program she used to do my taxes was more or less identical to turbotax. So are the simple wills that lawyers do really any different from what you can do yourself using Quicken Willmaker (which also does things like power of attorney, etc)? I mean, if you want to set up a trust or have complex issues at hand (like ex-spouses, kids from prior marriages, kids with disabilities), you probably really need a lawyer. But for a person of modest means who just wants to leave stuff to their kids, appoint a guardian, etc, do you really need a lawyer? I'm not convinced.

Posted by: another anon | December 12, 2007 2:18 PM | Report abuse

Anne, if your attorney's draft had multiple mistakes and the draft was never finalized, you should be able to make the changes with out paying any additional fees. Just write in your corrections and contact your attorney to make the changes. They usually do not charge for changes to the original draft if it has not been finalized. It is worth at least asking him/her.

Posted by: foamgnome | December 12, 2007 2:20 PM | Report abuse

moxiemom- Seriously! What you said.

Posted by: atb | December 12, 2007 2:35 PM | Report abuse

"But for a person of modest means who just wants to leave stuff to their kids, appoint a guardian, etc, do you really need a lawyer? I'm not convinced."

The benefit of using a laywer is he/she will explain to you all of the possible problems that could occur if you just leave everything to your kids. A (good) lawyer will also ask you all the questions you wouldn't think of on your own (or even know existed because you aren't a lawyer).

And no, I'm not a lawyer, I'm just speaking from the experience of going through the estate planning process with one. My wife and I are "of modest means", but there were a heck of a lot of things that could've gone wrong if we only had simple wills leaving everything to the kids and appointing a guardian.

Posted by: Anonymous | December 12, 2007 2:40 PM | Report abuse

" there were a heck of a lot of things that could've gone wrong if we only had simple wills leaving everything to the kids and appointing a guardian."

I'm not trying to be a pain, but can I ask what kinds of things? I am just trying to justify a rather large expenditure, and so far I have nothing concrete.

Posted by: another anon | December 12, 2007 3:04 PM | Report abuse

One thing is what happens if you and your wife are incapicatated but not dead? A will only becomes active after you die. You need to designate someone to handle your finances, a guardian for the children, etc. for that situation - whatever is in your will is meaningless.

Another thing is setting up your estate to avoid probate. It can take 6 months, during which time your assets are frozen.

Another is determining when the kids will have access to their inheritance. If you leave everything directly to them, they will have full access to their shares on their 18th or 21st birthdays depending on the state. My wife and I have $2 million of life insurance between us and I don't think a 21 year old is capable of handling that kind of money.

There are plenty more that I can't think of at the moment. And yes, you could probably use a do-it-yourself kit for a lot of it. At the same time, the way the laws are, it's easy to missomething that could leave you open to having your will contested or your kids in the middle of a custody battle. A good lawyer will make sure you and your family are protected. When it comes to the welfare of my kids, I'd rather play it safe than leave it up to a $25 piece of software.

Posted by: Anonymous | December 12, 2007 3:36 PM | Report abuse

another anon: some of the things our attorney spoke to us about was splitting the duties of trustee and guardianship, specifically stating whether we wanted a certain amount of the $$ withheld from the child till a certain age, and designating a certain amount of money to the child without the surviving parents approval. For the first example, suppose the you think brother A and wife would make wonderful parents and love and nurture your kid but is horrible with money. Brother B may be great with money but really can't stand kids for more then 30 minutes at a time. You might want to split up the duties. You don't want to leave a significant amount of $$ to a kid at 18 because they could blow all the money on cars, jet skis and partying. But you want funds available for four years of college. You may designate a certain % to go to college fund or training money and at 25-35 the remaining of the estate should go to the kid. The last one was weird for me. My child is so young (4) and it is hard to imagine. But say you have a fair amount of $$ (meaning enough to raise the child, provide college and a little nest egg after that). If you leave every thing up to the surviving spouse and you die then everything depends on how the surviving spouse chooses to handle the estate. Ok at age 4, father is absolutely in love with daughter. But by age 17 daughter has five piercings and a boyfriend husband can't stand. Father no longer wants to pay for college. Or child is age 22 and father remarries and decides all the money should go to new wife. I know it is hard to even imagine but it is something to think about. These are just examples.

Posted by: foamgnome | December 12, 2007 3:50 PM | Report abuse

I'd just like to contribute here and say that even in the most simple cases, wills and trusts can be very helpful for those who remain to sort out the estate. One of my friends just lost her husband suddenly at age 27. They had only been married for four months and had not gotten around to forming a will. The hassle of not having a will made everything even harder to deal with at a time when EVERYTHING was hard to deal with. The fact that she did not seek legal advice also resulted in her paying off some of his debts that she did not have to, like the credit cards. He owned his own business so it got even harder. Lessons I learned: make a will, even if basic and in the event that your spouse predeceases you, get good legal advice.

Speaking of legal advice, I have a question. Does anyone know if one's beneficiaries get taxed on a life insurance payout? As a single gal, my parents are currently the beneficiaries of my policy...

Posted by: lca | December 12, 2007 4:36 PM | Report abuse

Life insurance is not taxable income - http://www.irs.gov/faqs/faq4-9.html

Posted by: Anonymous | December 12, 2007 5:25 PM | Report abuse

"The fact that she did not seek legal advice also resulted in her paying off some of his debts that she did not have to, like the credit cards"

I don't see how she wouldn't have to pay his debts (as they probably became her's upon marriage) but it was the "right" thing to do.

Posted by: Anon | December 13, 2007 8:37 AM | Report abuse

As for the issue of selecting a guardian for your children, it's a tough one as your choice may change over time.

My husband has two siblings - I have one sister. At the time we wrote up our will, my sister was not married, and his sister was not married. We chose as our guardians his brother and sister-in-law. I am very comfortable with this because my sister-in-law and I are very close and have very similar values and background. However, we indicated that if they were ever to separate, then our choice as guardian would my sister, regardless of whether she was married. I didn't like the idea of my daughter eventually being raised by my sister-in-law alone, or remarried to someone else, nor did I like the idea of my daughter being raised by my brother-in-law alone, as I would not have control over who he would remarry and it might not be someone that I felt shared my values as much as my sister-in-law. Also, my husband's other sister is about to get married, so in time there may be a third family option as well.

Since we wrote our will, my sister has married and also had a child. We will be moving back into the area, near to where she lives, and in a few years if I feel like she and her family have become close with my daughter, I may have the will changed to reflect that.

I think it's important to choose the people that you are most comfortable with to raise your child, even if it is someone that is not part of your immediate family. Thankfully we have many good options within our family.

I've also been told (and agree) that it's best to select, when possible, someone of your own generation (ie not your parents or in-laws) since that choice will obviously be available for longer.

Posted by: viennamom | December 13, 2007 9:25 AM | Report abuse

"I don't see how she wouldn't have to pay his debts (as they probably became her's upon marriage) but it was the "right" thing to do."

This is the post that proves the point - people make a lot of assumptions that aren't necessarily correct, such as this one. Debts do not always automatically transfer to a spouse upon a person's death. And neither does property. And spouses do not always automatically have the right to make decisions if their spouse is incapacatated. And so on. This is why you need to talk to a lawyer.

Posted by: Anonymous | December 13, 2007 9:35 AM | Report abuse

My husband and I have wills and trusts and advanced directives and powers of attorney. We put off doing them for a number of years, even though we have children. WE used many of the same arguments that those who are putting off doing their wills are using in this chat. Guess what prompted us to get this done? My divorced mom fell into a coma and died suddenly on her way to work ( she was absolutely healthy up to that point)--without a will, without advanced directives or anything. We couldn't even get her doctors to talk to us at first because of this. Suddenly everything was in flux. I am an attorney and was appointed the personal representative for my mom. Settling the estate was an absolute nightmare. Something my siblings and I did not need while we were struggling with our grief! My mother had not updated some of her beneficiary forms although she had (she thought) settled some things in her divorce agreement. She assumed everything would go to her adult children. She was wrong. Luckily my dad is not a jerk and helped to convince the courts that the children were the intended recipients. However, it took two years and in the mean time destroyed the relationship of the children. One child felt she deserved all the money and property and was adamant to the point of filing a court case on the matter. In any case,my point is a will would have helped tremendously. Acting as a the legal representative for my mom also showed how little the courts care about anything to do with the family.

After that experience I realized that there is no way I want to put my children through that experience.
On the guardian issue, we chose very carefully. We also chose three different sets of people in case, something happened to the first set or the second set (or if they no longer met the conditions we had set forth. For example, We were able to draft clauses that stated the children go to X couple if the couple is still married and still living within 100 miles of our kids address. We chose back up people in case, the original couple also died or didn't meet the criteria. We did this because we feel strongly that certain members of our family should not have the children (one member who would be in line according to the courts and might fight for the kids is very mentally unstable). I think even if you think that your family is all equally able to take care of the kids I suggest you at least think about realistically.

Although this was an extremely difficult task, we feel so much relief knowing that we have done my best to help my children not have to deal with these issues after my and my husband's death. Grief can be overwhelming and adding all these technical legal issues makes everything worse--believe me I know! BTW I used an attorney who specializes in estate planning and probate law. She is a sole practitioner and her rates were very reasonable.

Posted by: montgomery village md mom | December 13, 2007 11:51 AM | Report abuse

Sorry for the grammatical mistakes, I was typing fast. In addition, the last paragraph should read that we did the best for our kids, etc. I also forgot to add that we also chose different people to be the trustee of the money and a different set to be guardians of the kids. We felt it was important not to have one person be both.

Posted by: montgomery village md mom | December 13, 2007 11:56 AM | Report abuse

"You can use the money you'd spend on a big-screen TV to protect your children."

... um, I wouldn't spend that money on a big-screen TV. Why not say 'you can use the money you'd spend on a vacation home in Acapulco' or 'you can use the money you'd spend on a Ferrari' - a lot of us have tied-up assets (home, IRAs) but not nearly enough to scrimp together $1500+.

Posted by: Anonymous | December 13, 2007 6:24 PM | Report abuse

What do you care if there's a hassle over your estate -- you'll be dead. Let the vultures pick over it ad nauseum. My will is made out so it all goes to a charity. I don't want my evil sister-in-law (oh, sorry, they're called SIL here, right?) to get her acrylic claws on it. She would just go out and buy another car or a fur coat with it.

Posted by: Anonymous | December 14, 2007 11:23 AM | Report abuse

Why do you care if your sister in law gets any of your money - you'll be dead.

Posted by: Anonymous | December 14, 2007 4:50 PM | Report abuse

Wills, trusts, Power of attorneys, health care dirrectives -- we've got them all.

It's all about planning for the unexpected. You have to look at all the different scenarios. To those who say "we don't have trusts because if my husband dies, everything goes to me", how do you know that you BOTH won't die at the same time, of within days of each other?

If you have kids, your crazy if you don't have your wills done.

Any will is better than NONE! If you can't afford the money to hire an attorney, check out Nolo Press's will software!

Posted by: MacDad | December 17, 2007 9:40 AM | Report abuse

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